AUSTRALIA AND NEW ZEALAND BANKING GROUP 2001-10-25 ASX-SIGNAL-G
HOMEX - Melbourne
+++++++++++++++++++++++++
CHIEF FINANCIAL OFFICER'S REVIEW (CONTINUED)
GLOBAL TRANSACTION SERVICES
CAROLE ANDERSON
Provision of cash management, trade finance, international payments,
clearing and custodian services principally to institutional and
corporate customers, and B2B eCommerce services.
HALF FULL FULL
YEAR YEAR YEAR
SEP 01 SEP 01 SEP 00
$M $M $M
Net interest income 99 192 178
Other external operating 119 236 219
income
Net inter business unit (11) (24) (32)
fees
OPERATING INCOME 207 404 365
External operating (56) (108) (104)
expenses
Net inter business unit (41) (84) (94)
expenses
OPERATING EXPENSES (97) (192) (198)
Profit before debt 110 212 167
provision
Provision for doubtful (4) (8) (5)
debts
Income tax expense and (36) (69) (57)
outside equity interests
NET PROFIT ATTRIBUTABLE TO 70 135 105
MEMBERS OF THE COMPANY
Operating expenses to 46.9% 47.5% 54.2%
operating income
Net specific provisions (2) (1) (2)
Net non-accrual loans 9 9 8
TOTAL EMPLOYEES 866 866 887
Global Transaction Services' (GTS) profit increased by 8% to $70
million in the second half. Key features of the result were:
* higher net interest income from growth in deposits and securities
lending which was partly offset by continued margin contraction as
interest rates fell
* a 2% increase in other operating income, which includes higher
structured trade and cash management transaction fees. The
introduction of new international payments products contributed to the
year on year growth of 8%
* operating expenses increased by 2%, with lower personnel costs from
staffing reductions offset by costs associated with establishing a
trade processing joint venture, software spend on enhancing eCommerce
capabilities and slightly higher non-lending losses
In an annual survey of customer satisfaction by independent
consultants, Roberts Research Group, ANZ International Trade
Services has been rated as the best of the major Australian banks
for the last four years. ANZ Cash Management topped the June 2001
Asiamoney magazine poll as Overall Best Cash Management Bank in
Australia. Respondents were drawn from larger corporate and
institutional customers.
GTS is well placed to achieve growth objectives, with areas of
strong, sustainable competitive advantage in Trade and Cash
Management. Our strategy includes the e-enablement of products and
delivery channels, and the implementation of new business models,
for example wholesale transaction services and the Proponix trade
processing joint venture.
B2B eCommerce
Over the course of this year Business eCommerce completed its
development agenda including:
* incorporation of Public Key Infrastructure (PK) into the Secure
Access & Authentication System
* development of ANZ Impact, a web-based financial modelling and
data capture tool for use by business customers and front line staff
* automation of Commercial Bill drawdowns and rollovers with plans to
automate other debt products
* introduction of a customised user interface to the bank enabling
corporate customer staff to tailor the way they access and view
information and applications
With completion of these developments, responsibility for
commercialising and developing further eCommerce products has been
taken up by individual business units.
INTERNATIONAL AND SUBSIDIARIES
ELMER FUNKE UPPER
Comprises the Group's operations in the Asia and Pacific regions
together with the Asset Finance and Investment Management businesses
HALF FULL FULL
YEAR YEAR YEAR
SEP 01 SEP 01 SEP 00
$M $M $M
Net interest income 303 615 613
Other external operating 270 508 446
income
Net inter business unit (46) (91) (92)
fees
OPERATING INCOME 527 1,032 967
External operating (200) (417) (450)
expenses
Net inter business unit (43) (83) (40)
expenses
OPERATING EXPENSES (243) (500) (490)
Profit before debt 284 532 477
provision
Provision for doubtful (46) (91) (87)
debts
Income tax expense and (87) (157) (170)
outside equity interests
NET PROFIT ATTRIBUTABLE TO 151 284 220
Net loans and advances
including acceptances 16,532 16,532 16,072
Other external assets 9,884 9,884 8,300
External assets 26,416 26,416 24,372
Deposits and other
borrowings 16,740 16,740 15,312
Other external liabilities 10,238 10,238 10,013
External liabilities 26,978 26,978 25,325
Net interest average margin 2.36% 2.48% 2.96%
Return on assets 0.97% 0.94% 0.85%
Return on risk weighted assets 1.48% 1.41% 1.20%
Operating expenses to operating 45.7% 48.2% 50.4%
Operating expenses to average
assets 1.54% 1.64% 1.88
Net specific provisions 52 81 154
Net specific provision as
a % of average net advances 0.62% 0.49% 1.01%
Net non-accrual loans 156 156 248
Net non-accrual loans
as a % of net advances 0.93% 0.93% 1.53%
TOTAL EMPLOYEES 3,799 3,799 4,079
International and Subsidiaries Division contributed $151 million (15%)
to the Group's operating result for the half, a 14% increase over the
March 2001 result. The key factors were:
* a well defined asset writing strategy in Asia, focussing on
capturing trade flows in the region as well as maintaining and
strengthening relationships with top end multinational corporate
clients
* a re energised sales platform in the Pacific augmented by a
continuous improvement program
* selective acquisitions and start ups in the Pacific augmented by a
continuous improvement program
* selective acquisitions and start ups in the Pacific region
* improved Investment Management performance
* introduction of a new technology enabled operating platform in Asset
Finance
ASSET FINANCE
PETER McMAHON
Provision of asset based finance including leasing and hire purchase;
and issues of debentures to investors
HALF FULL FULL
YEAR YEAR YEAR
SEP 01 SEP 01 SEP 00
$M $M $M
Net interest income 170 347 364
Other external operating 32 59 50
income
Net inter business unit (3) (8) (12)
fees
OPERATING INCOME 199 398 402
External operating (77) (158) (169)
expenses
Net inter business unit (15) (30) (30)
expenses
OPERATING EXPENSES (92) (188) (199)
Profit before debt 107 210 203
provision
Provision for doubtful (33) (66) (65)
debts
Income tax expense and (22) (45) (48)
outside equity interests
NET PROFIT ATTRIBUTABLE TO 52 99 90
MEMBERS OF THE COMPANY
Operating expenses to 45.7% 46.7% 49.0%
operating income
Net specific provisions 50 86 60
Net non-accrual loans 66 66 60
TOTAL EMPLOYEES 1,270 1,270 1,491
Asset Finance operates as Esanda in Australia and as UDC in New
Zealand, and as Esanda FleetPartners in Australia and New Zealand.
The business also offers debentures to investors, marketed through
the customer business units, investment brokers and financial
planners.
Asset Finance's profit increased by 11% to $52 million in the second
half. The key features of the result were:
* operating income remained relatively steady, with new business
profitability holding satisfactorily in the face of competitive
pressures and the need to focus on maintaining a quality loan book
* a 4% reduction in operating expenses, driven by staff reductions
achieved by organisational realignment and business rationalisation.
This is consistent with a strategy of focusing on intermediaries and
developing excellence in operational processing, coupled with the
continued success of technology-driven efficiency initiatives
* an increase in the level of specific provisions mainly in the
small business segment of the portfolio, which has been more
sensitive to the softening economy over the last 12 months. net
non-accruals decreased due to recoveries and non-provisioned
write-offs
MORE TO FOLLOW